Authorised officer conducting the search & seizure cannot retain the documents/ assets beyond 15 days and encash IVPs for adjustment against tax liability

Last updated: 14 December 2021
Quick Summary
The Kerala High Court ruled that an authorised officer conducting a search and seizure under the Income Tax Act cannot retain seized documents or assets for more than 15 days. Any encashment of assets, such as Indira Vikas Patras (IVPs), by the authorised officer beyond this period is considered without authority and jurisdiction. Consequently, adjustments made against tax liability from such encashments are illegal, and the status quo ante must be restored.

Court :
Kerala High Court

Brief :
The Hon'ble Kerala High Court in Dr. R.P. Patel & Ors. v. the Assistant Director of Income Tax (Investigations) & Ors. [WA No. 352 of 2005 dated July 30, 2021] set aside the judgment of the learned Single Judge denying benefit to the assessee under the Kar Vivad Samadhan Scheme, 1998, ("the Scheme"). Further held that, the Authorised Officer conducting the search and seizure cannot retain the documents or assets beyond 15 days as per the scheme of Section 132 of the Income Tax Act,1961 ("the IT Act") and all encashments has been done without authority or jurisdiction.

Citation :
WA No. 352 of 2005 dated July 30, 2021

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Bimal Jain
Published in Income Tax
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